Business pre calc 147 annuity

Question

Emma and Diego plan to send their son to university. To pay for this they will contribute 8 equal yearly payments to an account bearing interest at the APR of 2.3%, compounded annually. Six years after their last contribution, they will begin the first of five, yearly, withdrawals of $57,500 to pay the university's bills. How large must their yearly contributions be?

Answer 1

We use pv and pmt formulae in excel to solve this

first let us find the present value of their withdrawals for 6 years of amount 57500 every year

=pv(rate,nper,pmt,fv,type)

=pv(2.3%,6,57500,0,1)

=x

Let us find the present value of that amount five years before

=PV(2.3%,6,0,x,1)= y

The 8 equal contributions we use pmt formulae =PMT(2.3%,8,0,y,1)=z

yearly contribution needs to be z

just calculate x,y,z, and the z is the final solution